Employment up for the first time in two years

As predicted, the percentage of jobseekers in the second quarter of 2010 began to drop, but slower than the registered unemployment rate. Within a quarter, the percentage of jobseekers dropped 1.0 percentage point (to 19.4% of the economically active population) while the registered unemployment rate dropped by 1.7 percentage points. For two thirds of the registered unemployed the nine-month unemployment benefits have already run out, which has a dampening effect on their motivation to maintain their unemployed status at the State Employment Agency (NVA).

The shrinking of the percentage of jobseekers in one quarter is greater than might be expected as a result of the seasonal effect. The number of employed grew in the second quarter for the first time in two years. An increase in vacancies is confirmed both by the labour survey data of the Central Statistical Agency (CSP) and the State Revenue Service (VID) data on the number of employees. It is important to note that the aforementioned increase in vacancies was effected by the recovery in the private sector and not changes in the number of those involved in the "100-lats programme". The number of those involved in temporary employment provided by the NVA hardly changed over the quarter and had no substantial effect on the changes on the percentage of jobseekers. The VID, on the other hand, publishes the number of employees for whom social security payments are made, whereas for the participants in the "100-lats programme" no such payments are made.

According to the CSP labour survey, the number of jobseekers in the second quarter of 2010 was 226 thousand. This number is probably exaggerated. Based on the data of household surveys, the CSP calculates the number of jobseekers in the selection (19.4%) and applies it to the total number of the economically active population of Latvia. According to the CSP data, however, the population of Latvia is higher than the real number, since the official statistics accounts only for long-term migration (involving a change of residence), but does not account for those residents of Latvia who have gone abroad to earn money for a limited period of time. The difference between the real number of economically active population and the official 1.16 million we will know for certain after the results of the 2011 census are toted. However, making an educated assumption that the difference amounts to 100-150 thousand people, of which most went abroad during the overheating period, the number of economically active population in Latvia could be around 1.05 million. Thus the real number of jobseekers could be 204 thousand and one half of the 42 thousand difference in the number of unemployed that exists between the data of the CSP labour survey and the NVA-registered unemployed could be accounted for by the unregistered emigration.

The data of labour survey confirm that a gap is forming between the skills demanded and supplied on the labour market. Currently there is a demand for highly qualified employees while the majority of jobseekers are less qualified. Among those with college education, the percentage of jobseekers is three times less than among those with a basic education (respectively 10% and 31%); this difference grew rapidly particularly during the recession. In the second quarter of 2010, however, a reduction in the inequality of income among salaried employees was marked for the first time in 1.5 years. According to the breakdown of employees by the average net pay published within the framework of the CSP labour survey, the percentages of both those who receive low (up to 200 lats) and those who receive high (above 1000 lats) net salaries have dropped (respectively 42.4% and 0.8%). The percentage of those earning between 200 and 1000 lats, on the other hand, has grown.